Đề tài Globalization and its effects on the development of educational service in Vietnam

other countries. This would imply that trade has raised income per capital levels, but more so in more advanced countries. 1.4.1.2 Trade and supply of education at macro level Trade provides an incentive to increase the supply of skilled workers if the country specialises in more skill intensive sectors. However, it can have a more direct macro effect on the supply of education. There are basically two channels. The first is that increased trade can lead to faster growth (traditional trade theory anticipates this to be temporary, while new growth theory expects this to be permanent) which should free up more fiscal resources for the supply of education. The econometric evidence demonstrates that there is a positive correlation between export orientation and growth (and between openness to imports and growth). Dollar and Kraay (2000) find a positive relationship between openness, growth and incomes of the poorest one-fifth of the income distribution. They include results with regard to the relative importance of domestic policies (in as far as they can control government consumption, inflation, primary education and the rule of law) and trade outcomes (export and imports as per cent of GDP). But studies like these do not confirm the direction of causality (on which evidence is less conclusive) nor the importance of trade policies, as it is not clear what drives exports (or imports). On balance, the evidence suggests that openness to trade is conducive to growth, conditional on appropriate domestic policies and institutions. A second channel is through fiscal revenues from trade taxes. A number of countries depend on trade taxes (e.g. import duties) for their fiscal revenues, and recently these may have decreased as a result of lower import duties (if not compensated for by a more than proportional increase in the volume of imports) and this would lower the amount of resources available for the provision of education. 1.4.1.3Trade and education at the micro level The effects at the micro level are basically similar to the effects at the macro level. They manifest themselves in two ways. First, returns to education are often highest in the export firms/sectors, particularly for the skilled workers, see Table 1 Table : Wage premia in exporting firms, by skill level Country Wage Premia in exporting firms Aw and Batra (1999) Taiwan 30 % for skilled workers; 14 % for less skilled workers Isgut (2001) Colombia 12.2 % on average, but greater for white collar workers Milner and Tandrayen (2003) Five African countries 8.5 % to 17.6 % for all workers, but greater for white collar workers Secondly, trade (imports as well as exports) forces firms to become more productive and competitive, employing more skilled workers and providing more training. Moran (1998) and Chuang (1998) finds that exposure to foreign competition is important for skill upgrading. Firms that are part of a global competitive network, which forces them to remain competitive, appear to have more incentives to invest in training and education and will employ more skilled workers, and are also more likely to introduce the latest technology requiring further training. Thus, continued participation in export markets requires continuous skill upgrading through training. There is also increasing interest in the impact of global value chains on upgrading of suppliers in developing countries. Value chain governance influences how production capabilities in suppliers are upgraded. Value chain analysis considers four types of upgrading (Kaplinsky and Morris, 2001). Process upgrading is associated with increases in the efficiency of production processes within or between stages of the value chain. Product upgrading leads to improvement and introduction of products. Functional upgrading changes the mix of activities and functions conducted within the value chain or firm (for example, taking responsibility for marketing and design, improving transactions, and optimal redistribution of activities). Finally, chain upgrading involves moving to a new value chain. As discussed before, upgrading requires human capabilities. A classic example where upgrading helped to raise the human capabilities of suppliers is the textile and clothing value chain in several Asian countries (Gereffi, 1999). East Asian countries upgraded production processes and functions (from simple assembly to marketing and design) in the context of ‘triangle manufacturing’, whereby developed country buyers place orders with East Asian countries, who in turn became successful entrepreneurs and outsourced parts of the production to low-wage countries (China, Indonesia, Vietnam). East Asian countries are now much more involved in design and other functions further down the value chain. However, other countries (e.g. Central American countries) are locked into the upstream part of the value chain with few incentives (from lead firms lower down the chain) to upgrade. 1.4.2 The effects of FDI on Education Chart * illustrates the links from FDI (inward) to education. FDI can affect the demand and supply of education and training, and the effects are usually different from the effects of local investment. We also distinguish between micro (firm level) and macro effects. Chart *: The effects of FDI on Education. 1.4.2.1 Macro effects on demand for education MNEs can affect the demand for skills in different ways. Firstly, MNEs may affect the scale of operations. This depends on whether they substitute or complement local employment. It is difficult to generalise on the MNE-scale of employment link as much depends on the country, industry, type of investment and time span under consideration (see e.g. OECD, 1995) and policy interventions (Lee and Vivarelli, 2004). Secondly, MNEs can employ a more skilled workforce than otherwise similar local firms, resulting in a composition effect. Increased MNE activity tends to shift the relative demand for skills upwards. Finally, (indirect) evidence is emerging that MNEs have accelerated SBTC (skill-biased technological change). Over the last 30 years SBTC within firms or sectors (hence no composition effect) has become widespread in both the developed and the developing world (Berman et al., 1998, and Berman and Machin, 2000), and MNEs may have transferred skill-biased technologies, making skilled workers more productive. When MNEs enhance opportunities for skill-biased technical change they raise the relative demand for skills, holding other factors constant. 1.4.2.2.Macro effects of FDI on the supply of education The macro effects of FDI on education are complex and run in part through increased growth and productivity and through dynamic incentives provided to the economy. It is generally acknowledged that FDI leads to growth in developing countries, conditional upon appropriate policies (education, infrastructure etc.) being in place (UNCTAD, 1999, and Mortimore, 2004, for a survey and critique of spillover studies). This can lead to more (private and fiscal) resources, some of which can be used for the provision of education. As discussed before, new growth models and international business studies predict that when countries liberalise their trade and investment regime in an environment of imperfect technology transfers, they will specialise in activities depending on the initial conditions such as skill endowments. Countries with few skills tend to specialise in low-skill intensive production, while countries with a high innovation rate and skill endowment tend to specialise in the production of high-skill intensive goods. The econometric evidence based on an unbalanced panel for 111 countries over seven five-year time periods from 1970 to 2000 confirms that FDI enhances skill development (particularly secondary and tertiary enrolment) in countries that are relatively well endowed with skills to start with (Te Velde and Xenogiani, 2005). Not all countries use financial and natural resources well. For instance, Mauritius and Botswana are very different from Nigeria though all have received significant FDI. Nigeria did attract a lot of FDI in petroleum related activities but the presence of this FDI has not lead to new incentives for developing secondary education; the indirect impact on education through fiscal revenues was also not used sufficiently for investment in human resource development. Mauritius, a small country relatively well endowed with human resources skills, on the other hand, has been able to develop since the 1980s on the basis of foreign and local investment in garments and textiles in the EPZ programme (UNCTAD, 1999; Subramanian and Roy, 2003). Skills, and secondary enrolment rates in particular, developed further as a result, although currently certain technical skills required to move into high skill activities such as financial services are under supplied. Mauritius engaged positively with globalisation with successful human resource development. Botswana used the resources from diamond exploitation by foreign companies in a responsible way by investing in Education. 1.4.2.3 Micro effects on demand for education As foreign owned firms operate at the technology frontier, they need to install the latest technology which requires skilled and educated workers. The idea that technology and skills go hand in hand has been discussed since Griliches (1969). There is some disagreement about what is cause and what is effect. On the one hand, Bartel and Lichtenberg (1987) provide evidence that the availability of skills facilitates the adoption of new technology. On the other hand, the use of superior technology often requires skilled workers. Teece (1977) investigated the nature and costs of technology spillovers from firms in one country to firms in another country, including spillovers between parents and affiliates. He argued that technology is not simply a set of blueprints available at zero costs. Instead there is ‘a great deal of uncodified information … carried by supervisors, engineers, and operators…’ (p.249). On this view, new technology requires skilled workers. Tan (2000) uses panel establishment data from Malaysian manufacturing and identified an increase over the 1977–1995 period in the employment of highly skilled professionals, managers and technicians (PMT). Tan also found that foreign firms are more likely to be using most types of IT, followed by jointventures, then by local firms. This implies that foreign firms introduce technologies that are associated with skill-upgrading, benefiting particularly the educated workers. 1.4.2.4 Micro supply of education and training – voluntary contributions MNEs affect the supply side of human resources through voluntary contributions, general education, official training and informal on-the-job training. Informal on-the-job training is likely to correlate with the skill content of the job, and hence MNEs offer more of this when they are more skill intensive. Little is known about the effects of voluntary contributions by private companies on education. The Commonwealth Business Council (2004) provides three examples of voluntary involvement of the private sector in education provision: Alcan operates 180 schools in Canada, US, Brazil and South East Asia, where 30,000 students at any time are taught about environmental protection and entrepreneurial skills; BAT (British American Tobacco) provides funds each year to follow tertiary education for 10 students from underprivileged backgrounds; Diageo/East African Breweries in Kenya sponsors 30 students to go to University. There are various reasons for this, but is in part motivated by self interest. For instance, in the case of Diageo, it had difficulties finding good quality technically educated graduates. Voluntary investments are also common by natural resource companies. Shell’s behaviour changed after its debacle in Nigeria and it stepped up its community spending there and in 2000 it amounted to US$60m annually (0.2% of Nigerian GDP), with US$1.2m for vocational training and US$2.5m for secondary and tertiary scholarships. Over 1998–2000 BP-Amoco expenditure on social investment rose from US$64.9m to US$81.6m, worth around 0.6% of total sales; a quarter of this was aimed at education, but a big share was invested in the US and the UK, and only a small share in developing countries. In 2000, ExxonMobil spent US$92m on community investment worldwide, worth around 0.3% of total sales, with US$19 million spent outside the US. Rio Tinto spent US$49.5m on communities programmes worldwide in 2000, worth over 1% of value added; 77% of Rio Tinto businesses offer programmes to improve secondary school education. 1.4.2.5 Micro supply – vocational training The involvement of MNEs in firm-specific and general vocational training is another way MNEs can affect the supply of skills. This goes beyond charitable giving and is in the self-interest of firms. There is evidence that MNEs provide more training than their local counterparts. Using a sample of firms in Colombia, Mexico, Indonesia, Malaysia and Taiwan – ranging from 500 to 56,000+ firms in single years in the early 90s – Tan and Batra (1995) found that firms are more likely to offer worker training when they are large, employ a highly educated workforce (except Indonesia), invest in R&D (except Indonesia), are export oriented (except Malaysia) and use quality control. All these characteristics are associated with foreign ownership (see Dunning, 1993). In addition, foreign ownership was associated with increased training in Malaysia and Taiwan. While foreign firms tend to train more than local firms, there may be difference amongst foreign firms according to their specific characteristics. Dunning (1993) suggests a breakdown according to the motivation for FDI and suggests that different motivations may potentially determine the extent to which MNEs engage in training activities. Natural resource investments are usually capital intensive requiring a handful of skilled workers (sometimes expatriates) to use complex extraction methods. This may involve specific training for a few employees (sometimes foreign education), but key employees are flown in. Efficiency seeking manufacturing MNEs offer only limited training because such MNEs are often motivated by the availability of low-skill, low-wage labour. Finally, training plays an important role in strategic asset-seeking MNEs. These often try to innovate and implement new leading-edge technologies. Both activities require well-educated workers, whose skills can be augmented by specific training. 1.4.2.6 Micro supply – tertiary education Some MNEs are involved in setting up general education centres that are sometimes open to outsiders. Such MNEs are often strategic asset-seeking MNEs which hope to develop projects using the skills and knowledge in host countries, and hence are likely to be more prevalent in wealthier developed countries. Business schools (for example, Harvard, MIT, London Business School, Stockholm School of Economics) have become international companies by setting up campuses abroad, especially in developing countries. Host country governments increasingly allow business education to be supplied by foreign companies inside their countries. The growing internationalisation of business education can help the spread of best practice techniques and internationally recognised standards in business education. International education providers are increasingly setting up centres in developing countries. Host-country governments increasingly allow (including through liberalisation in GATS) or actively attract (e.g. Singapore) business education supplied by foreign companies. This may help the spread of best practice techniques and international standards in business education, but there are consequences for equitable access to education, as in South Africa, of the increase in private provision of education. It is possible that foreign business schools in Asia can find a market, but offshore schools in the Caribbean cater often for developed country students (who come over from the US for a year or more) and only at the margin for local people. Thus, international schools may not be a substitute for local public or private provisions of tertiary education. 1.4.3 The effects of Migration on Education There are several effects of migration on the supply and demand for education. Chart ** shows the main links that we need to assess for the effects of emigration on ‘sending’ countries: effects of emigration on the education sector, both directly and through macro effects, and on the economy as a whole, both directly and through other effects. Chart **: The effects of migration on education systems 1.4.3.1 Migration and the supply/loss in teacher capacity in the education sector The literature on migration from 1960s (e.g. Grubel and Scott, 1966) emphasised that skilled migration affects ‘sending’ countries negatively. This is when the migrants contribute more to the economy than the marginal product, or when education and training of skilled emigrants is partly funded by revenue. Migration will lower the social rate of return of public investment in education. Teacher migration/mobility has been highlighted as having possible adverse effect on the delivery of education services (Sives, Morgan and Appleton, 2004). The literature indicates that it is important to consider the effects of emigration on domestic capacity according to type of country: smaller countries have more capacity problems when teachers emigrate than larger countries. This is because larger countries can respond more easily to the emigration of teachers, while the smaller countries tend to have the highest emigration rates. In part this is because it will more costly to replace workers in smaller countries than in larger countries. 1.4.3.2 Macro effects of migration on education Migration processes have several macro effects, some of which can benefit education systems in ‘sending’ countries, or groups within them. For instance, when teachers are scarce emigration of teachers will push up their wages in the source country. This is often a theoretical option only for the poorest countries, as they cannot afford to pay much more. Many developing countries have a comparative advantage in labour and would benefit from migration possibilities which would free up resources e.g. for education provision. Unfortunately, there are significant barriers for developing country labour to move to developed countries. Winters (2002) finds that an opening of developed countries to allow temporary entry by foreign workers, equal to 3% of the current workforce, would generate welfare (real-income) gains that exceed those from full merchandise trade liberalisation. If developed countries permitted movement of labour of up to 3% of the total labour force, world incomes would rise by $156 billion. Developing countries would be the main gainers and the net welfare for the African region would be $14 billion. Several studies have examined the impact of emigration on growth in ‘sending’ countries. The effects are complex. For example, Beine et al. (2003) find, using a cross-section of 50 developing countries, that most countries combining low levels of human capital and low migration rates of skilled workers are affected positively by emigration. That is emigration leads to more investment in human capital. By contrast, the brain drain appears to have negative growth effects in countries where the migration rate of the highly educated is above 20% and/or where the proportion of population with higher education is above 5%. 1.4.3.3 Migration and private incentives to invest in human capital The effects of migration prospects on human capital formation have been the focus of several studies (see Vidal, 1998; Beine et al., 2001; Docquier and Rapoport, 2004), suggesting that such prospects may in fact foster human capital formation and growth in ‘sending’ countries. If the return to education is higher abroad than at home, the possibility of migration increases the expected return to human capital, thereby enhancing domestic enrolment in education. More people, therefore, invest in human capital as a result of increased migration opportunities. This acquisition can contribute positively to growth and economic performance. Docquier and Rapoport (2004) go as far as to suggest that the optimal migration rate of a highly educated population is likely to be positive. Much of this argument remains a hypothesis and based on unrealistic assumptions, such as perfect capital markets; unfortunately not everybody who wants to invest in human capital can borrow the funds to do so. 1.4.3.4 Other effects of migration There are other effects. Firstly migration is associated with remittances (World Bank, 2004); migration raises the possibilities of finance for education through remittances (e.g. Adams, 2003). Total remittances to developing countries amounted to US$80 billion in 2002, about 50% more than official aid flows. Table : Remittances and migration Country Remittances, 2002, US $ million Tertiary educated share of total migrants (%) Migration rates of tertiary educated (%) Barbados 84 Cuba 1,138 Dominican Republic 2,111 22.6 14.2 Guyana 119 (16.6% of GDP) 40.7 77.3 Haiti 931 (24.2% of GDP) Jamaica 1,288 (12.2% of GDP) 41.7 67.3 Trinidad and Tobago 59 46.7 57.2 Source: Nurse, K. (2004) and own calculations Secondly, migrants can learn valuable skills which can offer benefits to the ‘sending’ country if and when migrants return (Domingues Dos Santos and Postel Vinay, 2003) and skills have been acquired abroad. Thomas-Hope (2002) finds that Caribbeans in the UK increasingly return to the Caribbean – this would be consistent with decline in brain drain reported before. For instance, children of migrants have become skilled in the UK and then returned Thirdly, the disapora helps to create business and trade networks (Dustmann and Kirchkamp, 2002; Mesnard and Ravallion, 2002). Arora and Gambardella (2004) discuss the diaspora and human capital flows. The diaspora creates links with other countries by acting as intermediaries. Chapter II: Education services in Vietnam under the impact of globalization 2.1 Education services in Vietnam under the impact of global trade Before 1986, the education system in Vietnam was a near carbon copy of Soviet education system. After 1986, Vietnam has followed an innovation process. This process is focusing on economic liberalization and following the market economy model. Participating in global trade is expected to help Vietnam develop well and improve many aspects such as in the Social, Cultural, and educational fields, etc. Chart: Imports and exports and commercial deficit in Vietnam( million USD) Source: Vietnamese Office of estimation 2.1.1 Trade and demand for education at macro level The increase in international trade activities has increased the demand for skilled workers in Vietnam. Trade activities have an effect on the labor market, therefore affecting education system in Vietnam. The great demand for skilled workers calls for an education and training system capable of supplying a high enough quantity and quality of workers. Specialization on a global scale has forced countries to focus on some particular sectors. Vietnam is not an exception to this process of international trade. In Vietnam the main products for export are agricultural products, and outsourced products, most of which require only low-skilled workers, who do not need specialized training. Therefore, Vietnam’s education system must conduct further research and development activities in universities, training more talented and creative people to increase the intellectual content of the nation’s export products. This increase in export and import activities promotes the process of technology transfer from developed countries to Vietnam. There are many different types of technology that must be operated by skilled workers. Since technology is constantly changing, universities in Vietnam need to alter training to make workers better able to adapt quickly to these changes. The demand for engineers and high skilled engineers from entrepreneurs, both inside and outside Vietnam, is massive. 2.1.2 Trade and supply for education at the micro level The increase in economic growth in Vietnam is due to increased activity of international trade, especially in exports from Vietnam. This should free up more fiscal resources for the supply of education. On the other hand the increase in export and import activities increases tax revenue. Therefore, the State budget in Vietnam is constantly growing. PUBLIC EXPENDITURE ON EDUCATION & TRAINING(VND billion) 2000 2001 2002 2003 2004 2005 2006 2007 Tot